Report from Bloomberg
In Brief – European digital policies are again being raised by the Trump Administration in US-EU trade talks, with Commerce Secretary Howard Lutnick linking lower tariffs on European steel and aluminum to the EU taking “the foot off” their digital regulatory framework. President Trump has called EU tech policies a non-tariff trade barrier and portrayed company fines as taxes. Lutnick’s comments followed a meeting with EU Commission Vice President Henna Virkkunen, the bloc’s top tech policy official, in which he raised concerns with the EU’s Digital Markets (DMA), which regulates the largest digital “gatekeeper” platforms to protect smaller businesses and competitors from anti-competitive practices, and the Digital Services Act (DSA), which regulates how platforms address objectionable online content. Commissioner Teresa Ribera, who heads up EU competition policy, responded with a post saying, “The European digital rule-book is not up for negotiation. We, Europeans, have adopted our rules to ensure fair markets and to protect consumers rights while backing Europe’s digital future.”
Context – President Trump’s willingness to immediately threaten trade retaliation for all kinds of foreign corporate taxes and regulatory penalties seemed appealing to some US tech companies who thought the previous administration did not stand up for them. However, then the President imposed large “reciprocal” tariffs on scores of countries, including the EU, without regard to tech policy, and the trade talks that ensued only sometimes included mention of tech issues, but often did not. At various times, trade talks with the EU have reportedly involved digital services taxes, the DMA, the DSA (especially involving so-called online censorship), and AI policy, without any agreements on any of them. US digital companies certainly don’t want to be hit by EU penalties in a full-scale trade war, while in Europe the perception that the continent is strategically vulnerable due to reliance on non-European technology giants has fostered “digital sovereignty” concerns and initiatives that include proposals to preference a wide range of EU-based tech providers.